Glenn Haydel charged that he and his wife 'suffered severe emotional and mental anguish,' and that their credit was harmed.

But it turns out Haydel, the uncle of former New Orleans Mayor Marc Morial, wasn't done collecting taxpayer dollars.

Last summer -- about 2 1/2 years after his stint behind bars ended, and seven years after officials first sought to cancel his consulting deal -- Haydel got another $40,000 check from the RTA as part of a federal legal settlement. He received a separate, undisclosed cash settlement with HealthSmart, the authority's insurer, court records show.

He got the money by arguing, successfully, that he and his wife, Lillian Smith Haydel -- who pleaded guilty to unrelated federal felony charges in 2004 -- were improperly dropped from the RTA's health plan.

Haydel first enrolled himself in the agency's employee health plan in 1994, Morial's first year in office, shortly after he landed a management contract that gave him vast authority over the city's transit system. Under the agreement, which was sweetened considerably over the years, Haydel ultimately earned $45,000 a month.

The contract was canceled in late 2002 by Mayor Ray Nagin's new RTA chairman, Jimmy Reiss, who accused Haydel of cheating the transit agency out of hundreds of thousands of dollars over a decade.

But Reiss' effort to dump Haydel got tied up in litigation.

Haydel filed suit in March 2009, alleging that HealthSmart failed to notify him and his wife that their RTA insurance coverage had been terminated in December 2007. The suit said that before Lillian Haydel had an unspecified medical procedure in 2008, "the medical providers" verified her coverage under the RTA plan.

After the treatment, the suit said HealthSmart denied the coverage.

In addition, the Haydels charged that no one informed them of their legal right to obtain temporary COBRA coverage, a more expensive option available to unemployed workers who want to stay covered under their former employers' medical plans.

The denial of the claim, according to the suit, caused the Haydels to be hounded by bill collectors and "forced to pay substantial medical costs ... out of pocket." In addition, it claimed, "Lillian Haydel had been rendered uninsurable" and "was unable to receive necessary rehabilitative treatment" aftr her medical procedure as a result of her coverage being dropped.

The Haydels charged they "suffered severe emotional and mental anguish," and that their credit was harmed.

RTA attorneys, who declined to comment on the case citing confidentiality provisions, argued in court filings that the Haydels were enrolled in the COBRA program and were notified of that action.

The agency's lawyers also countersued Haydel, charging that he had not paid insurance premiums after his employment with the agency ended -- an allegation the Haydels did not dispute. Agency officials said his failure to pay insurance premiums apparently went unnoticed after Hurricane Katrina essentially shut down the transit system for months.

Darrin Forte, one of the attorneys who represented the Haydels, declined comment on the case, citing the confidentiality agreement.

But he said the settlement was designed to avoid further expense.

"As with any litigation, there were risks on both sides,'' Forte said. "Rather than litigate further, all parties were able to reach a reasonable resolution outside of court."

The settlement presumably closes the books on a tumultuous and often-litigious relationship between Haydel and the agency he once oversaw.

Haydel's billings to the RTA grew steadily during his nephew's eight-year tenure as mayor, reaching a high of $1.27 million in 2000. In September 2001, seven months before Morial left office, the RTA board raised eyebrows when it approved a five-year, $3.7 million extension of Haydel's contract. The new deal also contained a poison pill, a $500,000 penalty for cancellation.

The agreement, which Reiss voided in 2002, called for Metro to receive $746,000 a year, about $300,000 more than the previous contract. On Haydel's watch, Metro and its subcontractors were paid more than $7 million by the RTA.

When Reiss fired Haydel, he refused to pay the cancellation fee.

Haydel sued the RTA and the agency countersued.

The legal dispute wasn't settled until March 2005 when the RTA handed over a $650,000 settlement check to Haydel, who agreed to liquidate Metro and to never again do business with the RTA.

The saga picked up again in August 2005 when a federal grand jury indicted Haydel on charges of orchestrating a scheme to fleece the RTA of more than a half-million dollars.

Haydel, who initially professed his innocence, pleaded guilty in May 2006.

He admitted to transferring $350,000 of the RTA's money into a personal bank account. Another $200,000 was paid in six checks to unnamed individuals and businesses "to facilitate the illusion of legitimacy,'' the federal indictment against him said.

Haydel acknowledged that to cover his tracks, he wrote several memos to RTA officials in which he falsely claimed to have spent the $550,000 on legitimate RTA projects. He paid the stolen money back shortly before turning himself in to federal prison officials in November 2006.

Less than midway through his two-year prison sentence, Haydel was released to a halfway house in October 2007.

When he filed suit in 2009, his wife, an insurance broker, had just been sentenced to five years of probation after pleading guilty in the same federal courthouse to bribing a New Orleans public schools official in exchange for insurance contracts.